Wisconsin Business and Commercial Litigation

On July 9, 2009, I posted about Luckett v. Bodner, a Wisconsin Supreme Court case that dealt with the withdrawal of responses to requests to admit.  One year later, and we’re right back where we started.  In Rivera v. Perez, the court of appeals reviews an Iowa County circuit court case on withdrawing admissions.  There, Perez failed to answer requests to admit, and the opposing parties moved for summary judgment based on the constructive admissions.  The court of appeals decided that the trial court erroneously exercised its discretion by denying Perez’s motion to withdraw the admissions.

The key issue, according to the court of appeals, is the centrality of the admission to the case, not whether there is evidence in the record that may contradict the admission.  Analyzing Luckett:

The court then said that “[t]he first requirement of WIS. STAT. § 804.11(2) emphasizes the importance of having the action resolved on the merits.” Id., ¶38. The court rejected the argument “that withdrawal of an admission cannot subserve the presentation of the merits of the action unless the admission is ’squarely and conclusively contradicted by something in the court’s record,’” holding instead “that withdrawal or amendment of an admission will promote the presentation of the merits of the action even when the admission is not conclusively contradicted by something in the record.” Id., ¶40. The court then concluded that “[t]he [trial] court’s discretionary determination that withdrawal of the plaintiffs’ admissions will subserve the presentation of the merits of the action was not an erroneous exercise of discretion,” because “[t]he parties evidently regard[ed] the question of Ms. Luckett’s damages for conscious pain and suffering as a key issue that they [would] dispute at trial,” and “[t]he plaintiffs’ admissions, if allowed to stand, would [have] effectively eliminate[d] a determination on the merits of these issues.” Id., ¶41. Accordingly, the court concluded that “granting the plaintiffs’ motion to withdraw the admissions aid[ed] in the ascertainment of the truth and the development of the merits,” satisfying the first requirement under § 804.11(2). Id.

So apparently, the only admissions that will not be subject to immediate withdrawal are those that are peripheral to the claims.  Why would anyone bother with admissions that are not central to the case?

Paralleling the prejudice element of the withdrawal inquiry with the application of a discovery penalty, the court established  what appears to be a nearly unreachable hurdle for those who try to enforce admissions.

Here, in contrast, the requests for admissions and interrogatories were approximately two months overdue when Perez moved to withdraw her admissions and provided answers to the requests; Perez agreed to participate in a deposition scheduled for the time period while the requests for admissions were outstanding, and further agreed to reschedule the deposition at the request of counsel; only approximately one month passed between the time of the deemed admissions and Perez’s request to withdraw her admissions; and Perez moved to withdraw her admissions when trial was still several months away.⁽¹⁶⁾ These facts, unlike the facts in Mucek, do not support a reasonable finding that allowing Perez to withdraw her admissions would result in prejudice to Haushalter based on egregious discovery violations.

We conclude that, under Mucek and Luckett, the record does not support a finding of prejudice in this case. While NCI’s egregious conduct supported the trial court’s exercise of discretion in Mucek, the same is not true of Perez’s conduct here. In Mucek, NCI took no action to comply with discovery for two years, separate from its failure to answer the requests for admissions; its first attorney withdrew based on NCI’s refusal to cooperate with discovery; NCI failed to comply with an order by the court compelling discovery; and NCI did not request to withdraw its admissions until five days before trial, and did not respond to Mucek’s requests for admissions until the first day of trial. Mucek, 252 Wis. 2d 426, ¶¶7, 14, 27. Accordingly, the trial court exercised its discretion to find that Mucek would be prejudiced by allowing NCI to withdraw its admissions, saying: “Rarely have I really seen such egregious conduct on the part of a defendant and to come in at the last moment and say the other side is not prejudiced and we should be able to essentially reopen this matter simply doesn’t carry any weight with me.” Id., ¶27.

Read it, perhaps weep, but almost certainly give up using requests to admit.  What’s the point when the only admissions that will stick are those that aren’t central to the case and only made by those who have committed egregious discovery violations?

In Luckett v. Bodner, 2009 WI 68, the Supreme Court exhaustively (I’m not kidding — the thing is 70 pages long) addressed the standards for withdrawal of an admission.  You may prefer to read the summary by Alex De Grande of the Wisconsin State Bar (for some reason that link’s not working, but you can find the article, for the moment, at www.wisbar.org) which distills the opinion to a more manageable length. 

Requests to admit are very handy tools to narrow the issues that must be tried, and for pinpointing areas of need for both parties.  And, despite my griping about the length of the discussion, it’s good to have a detailed review of this somewhat under-served procedural implement. 

The Court wasted little time in deciding that the trial court properly exercised its discretion by permitting the withdrawal in that the withdrawal would aid in the ascertainment of truth and the development of the merits (which seems fairly obvious).  The sweet marshmallow center of the opinion (depending, as always, upon which side of the dispute you fall) is this:

The “prejudice” contemplated by Wis. Stat. § 804.11(2) “is not simply that a party [obtaining the admissions] would be worse off without the admissions.”  To demonstrate prejudice in maintaining the action or defense on the merits, the party who obtained the admission “must show prejudice in addition to the inherent consequence that the party will now have to prove something that would have been deemed conclusively established if the opposing party were held to its admissions.”

 Prejudice in maintaining the action or defense on the merits “relates to the difficulty a party [here the defendants] may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to the questions previously answered by the admissions.”

The prejudice inquiry requires a court to “focus on the prejudice that the nonmoving party [here the defendants] would suffer at trial.”

It is the defendants’ burden to demonstrate that withdrawal or amendment of the admissions will prejudice them in maintaining their defense on the merits.

The defendants made a variety of prejudice assertions, none of which convinced the Court.  The lone dissenter, Justice Prosser, makes an impassioned argument for overturning the lower court’s decision. 

Whether you agree or disagree with the holding, this case is sure to provide some bullets for your next round of discovery skirmishes.